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Cable Follows-Through as Greenback Slides Towards Psych Level

The major psychological level in the U.S. Dollar Index is back in play. The early morning (pre-NFP) strength gave way to afternoon weakness as 79.00 is holding as near-term support. The Dow’s rally through 12,850 put the index near the highs of the range as the Dow closes near the highs of the session.

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GBP/USD Rejection at the 200DMA

The daily cable has exhausted at the 200 period Simple Moving Average (SMA) on the daily chart. There is arguably no more psychologically significant a combination of time frame and indicator as the daily chart with the 200 period in play. Here’s what the rejection is setting up.

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EUR/USD Fibonacci Sandwich

The EUR/USD continues to struggle as prices trade in a tight range. This price action reflects the confusion in the market and suggests that a more nimble, short term approach is merited. Defining where the range is being established needs nothing more than a healthy respect for psychological levels and a Fibonacci Retracement.

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The EUR/USD Enters a Zone of Major Resistance

The EUR/USD has a number of hurdles to overcome before a ceiling it established. I am looking for a ceiling - for now - since the market trend has transitioned into a sideways range. IT IS early in the transition but a “V” bottom is unlikely here with the underlying fundamental picture and the 1.3050 to 1.3200 area is a thick layer of resistance.

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Be wary of trend transitions and the confusion that accompany them

Transitional markets are the most difficult to gauge since the dominant psychology is shifting and potentially even reversing or pausing. What is a transitional market? The reading is taken from the daily chart and when the daily chart has been trending (for example) downward as the EUR/USD has been, transition occurs when the downtrend loses bearish sentiment and momentum and the 34EMA Wave begins to flatten out.

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